UNIVERSITY    OF    CALIFORNIA 

COLLEGE   OF   AGRICULTURE 

AGRICULTURAL    EXPERIMENT   STATION 

BERKELEY,  CALIFORNIA 


FARM=ACCOUNTING  ASSOCIATIONS 


EDWIN  C.  VOORHIES 


BULLETIN  403 

May,  1926 


UNIVERSITY  OF  CALIFORNIA  PRINTING  OFFICE 

BERKELEY,  CALIFORNIA 

1926 


Digitized  by  the  Internet  Archive 

in  2012  with  funding  from 

University  of  California,  Davis  Libraries 


http://www.archive.org/details/farmaccountingas403voor 


FARM-ACCOUNTING  ASSOCIATIONS1 

EDWIN   C.    V00EHIES2 


INTRODUCTION 

Agriculture  has  lagged  far  behind  industry  in  adopting  cost- 
accounting  methods  because  of  its  recent  emergence  from  a  self- 
sufficing  stage  and  because  of  the  lack  of  appreciation  of  what  farm 
accounting  can  do  to  help  in  efficiency.  It  has  been  difficult  for  agri- 
culture with  its  many  small  units  to  follow  industry,  as  the  latter,  with 
its  large  units  and  its  specialization,  has  been  in  a  position  to  employ 
trained  men  to  keep  its  books.  Because  of  this  handicap,  agriculture 
has  undoubtedly  suffered  in  efficiency.  The  pressure  of  other  matters 
and  unfamiliarity  with  accounting  methods  have  also  been  responsible 
for  the  failure  of  the  farmer  to  gauge  his  business  accurately. 

Farm  accounting  is  becoming  of  increasing  importance  both  to  the 
individual  farmer  and  to  the  state.  Competition  exists  not  only 
between  individuals  and  between  the  several  divisions  of  agriculture 
but  between  states  and  nations.  Accurate  knowledge  of  existing  con- 
ditions is  becoming  of  greater  importance  to  the  individual  or  the 
nation  who  would  compete  successfully.  Questions  of  vital  importance 
not  only  to  the  individual  but  also  to  the  nation  are  being  raised  as 
to  the  most  efficient  size  of  farm  enterprise.  This  has  especially  been 
the  case  in  many  of  the  countries  of  Europe.  Other  questions  of  con- 
sequence both  to  the  individual  and  to  the  state  can  be  mentioned. 
What,  for  example,  is  the  long-time  outlook  and  what  are  relative 
advantages  and  disadvantages  of  a  highly  specialized  farm  business? 
What  are  the  possibilities  of  developing  farms  which  will  utilize  avail- 
able labor  and  other  farm  resources  not  now  fully  used  in  the  special- 
ized business?  To  what  extent  should  the  production  of  low-value 
specialized  crops  be  discouraged  where  these  are  produced  as  one  of 
the  enterprises  in  the  farm  business  combination  when  the  outlook 
is  not  encouraging  for  the  future  disposal  of  these  particular  crops? 
How  can  farms  now  producing  small  amounts  of  an  inferior  quality  of 
specialized  products  be  reorganized  so  as  to  eliminate  the  most 
unprofitable  parts  of  the  business  and  at  the  same  time  maintain  or 


1  The  writer  is  indebted  to  Professor  O.  H.  Larsen,  Professor  of  Agricultural 
Economics  of  the  Royal  Agricultural  College,  Copenhagen,  Denmark,  for  informa- 
tion relative  to  farm-accounting  associations  during  the  writer's  stay  in 
Denmark. 

2  Mr.  Voorhies  was  Research  Fellow  on  the  American  Scandinavian  Founda- 
tion, 1924-1925. 


4  UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 

increase  the  present  income  ?  What  facts  should  be  presented  to  the 
marginal  producer?  How  can  the  production  of  highly  specialized 
commodities  be  best  adjusted  to  meet  the  long-time  market  prospects  ? 
How  can  the  efficiency  of  the  present  farm  business  be  increased? 
These  and  many  other  questions  have  not  been  answered  satisfactorily, 
although  opinions  have  been  rendered  which  have  not  been  sub- 
stantiated by  a  reliable  body  of  facts. 

The  economic  phases  of  agriculture  have,  especially  since  the 
World  War,  been  attracting  the  attention  of  public  and  semi-public 
agencies  in  this  and  other  countries.  The  various  agricultural  experi- 
ment stations  together  with  the  United  States  Department  of  Agri- 
culture have  given  marked  attention  to  the  cost  of  producing  and 
marketing  agricultural  products. 


FARM  ACCOUNTING   IN   THE   UNITED   STATES 

Efforts  have  been  made  in  a  number  of  states  to  encourage  the 
keeping  of  farm  accounts.  Several  agricultural  colleges  have  been 
especially  active  in  an  effort  to  inaugurate  systematic  farm  accounting, 
but  on  a  different  plan  than  that  described  in  this  publication. 

The  College  of  Agriculture  of  the  University  of  California  has  been 
engaged  in  both  cost-of -production  studies  and  farm-accounting  work. 
Three  publications  on  costs  of  production3  have  already  been  issued  by 
the  Division  of  Farm  Management  of  the  College  of  Agriculture. 

The  Agricultural  Extension  Service  of  the  College  of  Agriculture 
has  also  endeavored  to  conduct  cost-of-production  surveys  for  certain 
commodities  and,  in  addition,  has  since  1917  attempted  to  encourage 
bookkeeping  or  accounting  among  farmers.  At  the  present  time  the 
Agricultural  Extension  Service  is  extending  the  farm-accounting  idea 
by  four  different  methods  of  keeping  accounts:  (1)  By  means  of 
accounts  kept  by  the  individual  farmer,  (2)  by  means  of  farm  accounts 
kept  in  banks,  (3)  by  means  of  senior  farm  business  clubs,  and  (4) 
by  means  of  junior  farm  business  clubs.  The  first  method  has  not  been 
successful.  Account  books  were  distributed  to  farmers  and  but  few 
books  were  kept.  The  second  method  has  been  used  by  eight  banks  in 
seven  different  counties  in  this  state  and  in  1925  one  hundred  and 
thirty-nine   different   accounts   were   kept   for   farmers.      The   third 


3  Adams,  E.  L.  The  cost  of  producing  milk  and  butter  fat  on  246  California 
dairies.     California  Agr.  Exp.  Sta.  Bull.  372:1-64,  fig.  19.     1923. 

Adams,  E.  L.  The  results  of  a  survey  to  determine  the  cost  of  producing 
beef  in  California.     California  Agr.  Exp.  Sta.  Cir.  281:1-22.     1924. 

Adams,  E.  L.  Cost  of  Work  Horses  on  California  Farms.  California  Agr. 
Exp.  Sta.  Bull.  401;  1-20.     1926. 


BULL.  403]  FARM-ACCOUNTING   ASSOCIATIONS  5 

method  has  been  tried  but  has  not  been  entirely  satisfactory  because 
of  the  difficulty  in  getting  farmers  to  keep  their  own  records.  The 
original  plan  was  to  hold  a  meeting  of  this  club  once  a  month  with  the 
extension  specialist  in  farm  management  and  the  farm  advisor  for  a 
discussion  of  problems  involved  in  the  accounting  work. 

The  interest  of  the  young  people  in  the  community  in  farm  account- 
ing was  stimulated  during  the  summer  of  1925  by  the  organization  of 
junior  farm  business  clubs.  The  plan  is  to  have  a  local  banker  act  as 
local  club  leader.  Inventories  are  taken  by  the  club  members  with 
the  assistance  of  the  parent  and  the  representative  of  the  bank. 
Material  for  making  entries  in  account  books  is  collected  at  the  bank 
by  having  the  parent  pay  all  bills  by  check  and  itemizing  the  nature 
of  the  expense.  The  parent  also  itemizes  the  deposit  slips  as  to  the 
source  of  income.  Once  a  month  the  club  meets  at  the  bank  and  the 
members  make  entries  in  the  farm-account  book  under  the  direction 
of  the  banker.4 

Because  of  the  general  interest  in  the  subject  of  farm  accounting 
it  is  believed  that  research  and  extension  workers,  together  with 
farmers,  will  be  interested  in  a  discussion  of  a  plan  by  which  account- 
ing among  farmers  has  been  done  cooperatively. 

INTRODUCTION    OF    FARM    ACCOUNTING    IN    EUROPEAN   COUNTRIES 

Germany. — In  a  number  of  European  countries,  attempts  have 
been  made  by  private  individuals  and  by  both  public  and  semi-public 
institutions  to  encourage  the  keeping  of  farm  accounts.  The  result  has 
been  in  many  cases  the  establishment  of  agencies  generally  termed 
bureaus.  In  1872  Howard's  Bureau  was  established  as  a  private  enter- 
prise in  Leipzig,  Germany,  and  proved  a  success.  Several  branches 
were  organized  and  at  one  time  over  one  hundred  people  were 
employed  by  the  bureau.  Under  the  bureau  system,  reports  are  made 
by  the  individual  farmer  to  the  bureau  at  stated  intervals,  such  as 
every  week  or  month.  Expert  bookkeepers  on  receipt  of  the  farm 
reports  and  records,  set  up  the  books  and  keep  them  for  their  clients. 
The  earlier  bureaus  were  concerned  mainly  with  the  accounting  for 
larger  farms.  In  1896  the  German  Agricultural  Society's  Bureau  was 
founded,  which  differed  from  the  one  just  described  in  that  it  was  a 
semi-public  institution.  Most  of  the  records,  however,  were  received 
from  large  farms.  Weekly  reports  were  sent  out  from  the  farms  to  the 
bureau  for   posting. 


4  The  information  on  the  work  in  California  was  kindly  furnished  by  Mr. 
L.  W.  Fluharty,  Farm  Management  Demonstrator,  Agricultural  Extension 
Service,  College  of  Agriculture,  University  of  California. 


b  UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 

Switzerland. — It  remained  for  Switzerland  to  establish  the  system 
of  accounting  which  has  served  as  a  model  for  Norway,  Sweden,  Fin- 
land, and  Denmark.  Since  the  same  plan  is  used  in  all  five  countries, 
the  accounts  are  comparable.  During  the  past  year  Esthonia  has  been 
making  preparations  to  inaugurate  a  farm-accounting  system  similar 
to  that  worked  out  in  Switzerland5  and  especially  as  it  has  been  modi- 
fied in  Denmark.  Minor  variations  occur  between  the  actual  methods 
used  in  keeping  accounts  in  the  countries  mentioned.  In  addition, 
there  are  major  variations  in  the  manner  of  procedure  in  compiling  the 
data,  particularly  with  the  Danish  accounts. 

Under  the  leadership  of  Dr.  E.  Laur,  Professor  of  Agricultural 
Economics  in  the  Technical  College  at  Zurich,  the  Swiss  Farmers' 
Federation  started  the  work  of  obtaining  farm  accounts  from  all 
classes  of  farmers  in  every  section  of  Switzerland.  The  Swiss  Farmers' 
Federation  is  a  semi-public  institution  supported  financially  by  the 
farmers  of  Switzerland  and  subsidized  by  the  Swiss  Government.  The 
general  plan  of  procedure  in  obtaining  records  for  compilation  was  as 
follows:  (1)  Blank  forms  were  sent  to  farmers  who  obligated  them- 
selves to  furnish  information  in  the  manner  prescribed  by  the 
Farmers'  Federation  and  after  a  year  to  send  the  completed  papers 
to  the  central  office  of  the  federation  for  revision  and  analysis.  (2) 
Free  advice  was  given  to  the  farmers  for  carrying  out  the  details  of 
the  work.  New  participants  were  given  three  days  of  instruction. 
In  addition,  board  and  room  and  railroad  transportation  were  pro- 
vided. (3)  Participants  received  final  reports  of  the  analyses  of  farm 
records  from  the  central  office  gratis.  (4)  The  entire  report  of  compila- 
tions was  sent  to  all  intrants.  During  the  summer,  farmers  entering 
the  work  for  the  first  time  were  visited  by  an  expert  who  assisted  in 
explaining  doubtful  details  of  the  work.  The  expert  also  made  certain 
observations  and  descriptions  needed  by  the  main  office  for  completing 
the  records.  Farmers  who  carried  out  the  accounts  in  a  satisfactory 
manner  were  given  a  diploma  and  at  times  a  small  sum  of  money.  The 
Swiss  Farmers'  Federation  reserved  the  right  to  make  all  findings 
public,  the  names  of  private  individuals  being  withheld. 

The  results  in  Switzerland  have  been  made  public  in  The  Agri- 
cultural Year  Book  of  Switzerland  (Landwirtschaftliches  Jahrbuch 
der  Schweiz).  The  work  is  done  free  for  the  farmers  except  for  an 
indirect  tax  which  the  farmers  pay  in  taxes,  dues  to  the  federation,  etc. 

During  the  year  1923-24,  a  total  of  444  farm  accounts  was  obtained. 
Accounts  have  been  examined  and  reports  have  been  issued  without 


5  Unpublished  data. 


Bull.  403] 


FARM-ACCOUNTING    ASSOCIATIONS 


interruption  since  1901.  These  444  accounts  were  well  distributed  over 
Switzerland  with  the  exception  of  the  cantons  of  Inner  Switzerland 
(Innerschweiz),  namely  Glarus,  Appenzell,  Freiburg  and  Tessin, 
which  were  poorly  represented. 


TABLE   I 

Farm  Accounts  Used  by  Central  Agencies0  in  Various  European  Countrikk 
for  the   Compilation  of   Annual  Reports 


Switzer- 
la  nd 
Total 

Norway 

Fin 

and 

Sweden 
Total 

Denmark 

Year 

Total 

New 

Total 

New 

Total 

New 

1901-02 

111 

1902-03 

58 

1903-04 

136 

1904-05 

179 

1905-06 

206 

1906-07 

230 

1907-08 

250 

1908-09 

287 

1909-10 

276 

1910-11 

270 

1911-12 

283 

39 

1912-13 

291 

42 

21 

122 

1913-14 

303 

73 

39 

85 

29 

40 

1914-15 

288 

82 

36 

94 

47 

81 

1915-16 

259 

110 

19 

162 

88 

128 

1916-17 

300 

101 

27 

135 

22 

157 

1917-18 

353 
392 

408 
380 

397 

97 
101 

95 
111 
124 

12 
25 
10 
33 
34 

85 

84 

196 

240 

304 

211 
183 
200 
289 
364 

75 
235 
305 
391 

468 

1918-19 

183 

1919-20 

113 

1920-21 

121 

1921-22 

101 

147 

1922-23 

406 
444 

121 
151 

23 
53 

338 

380 

500 
534 
586 
6707 

110 

1923-24 

114 

1924-25 

134 

1925-26 

1845 

6507 

1247 

2033 

3764 

6  Switzerland,  The  Swiss  Farmers'  Federation  (Das  Schweizerische  Bauern- 
sekretariat). 

Norway,  The  Society  for  the  Welfare  of  Norway  (Det.  Kgl.  Selskap  for 
Norges  Vel). 

Finland,  The  Agricultural  Department    (Landtbrukssyrelsen). 

Sweden,  The  Royal  Agricultural  Department    (Kungl.   Lantbruksstyrelsen). 

Denmark,  The  Bureau  of  Farm  Management  and  Agricultural  Economics 
(Det  land0konomiske  Driftsbureau). 

7  Estimate  by  Prof.  O.  H.  Larsen,  Bureau  of  Farm  Management  and  Agri- 
cultural Economics,  Copenhagen,  Denmark. 


- 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


These  farm  accounts  have  been  analyzed  in  considerable  detail. 
From  1901  through  1923,  6507  accounts  have  been  received.  The 
average  size  of  the  farms  represented  was  approximately  13.22  hectares 
or  32.67  acres  (1  hectare  =  2.4711  acres).  The  number  of  accounts 
received  has  been  increasing  slowly  but  steadily.  An  increase  in  the 
number  would  be  valuable  but  if  much  larger  the  cost  would  be  pro- 
hibitive, since  the  reports  of  the  results  are  now  issued  annually  in  two 
parts  and  cover  a  total  of  approximately  210  pages.  The  number  of 
reports  received  each  year  is  shoAvn  in  table  1. 

A  considerable  turnover  from  year  to  year  is  evident  from  the 
following  table.  Of  the  444  farms  from  which  accounts  were  analyzed 
for  1923,  reports  had  been  received  from  them  for  a  varying  number 
of  years  as  will  be  seen  from  table  2. 


TABLE  2 

Distribution  of  Accounts  Analyzed  for  the  444  Farms  Reportng  to  the 

Swiss  Farmers'  Federation  in  1923-24  with  Reference  to  Number 

of  Yearly  Accounts  for  Each  Farm 


Yearly    accounts    for    each 

farm 

Number  of  farms 

1 
93 

2 
57 

3 
33 

4 
29 

5 

36 

6 

26 

7 
35 

8 

27 

9 

4 

10 
11 

11 
12 

Yearly  accounts  for  each 

farm 

Number  of  farms 

12 
15 

13 
10 

14 
4 

15 
6 

16 
4 

17 
9 

18 
6 

19 
12 

20 
9 

21 

2 

22 
0 

23 
4 

Since  1901  these  444  farms  have  had  a  total  of  2809  accounts 
analyzed. 

Norway. — Norway,  through  its  "Society  for  the  Welfare  of 
Norway"  (Selskapet  for  Norges  Vel),  organized  a  semi-public  bureau 
after  the  Swiss  model ;  this  bureau  issued  its  first  report  in  1912  for 
the  year  1911-12.  Owing  to  limited  finances,  the  number  of  accounts 
analyzed  has  been  comparatively  few.  For  the  year  1923-24,  one  hun- 
dred and  fifty-one  accounts  were  received  and  revised.  The  number 
of  accounts  analyzed  yearly,  together  with  the  number  of  new  accounts 
coming  in  each  year,  will  be  found  in  table  1  (p.  7). 

Table  3  shows  the  number  of  yearly  accounts  which  the  one 
hundred  and  fifty-one  farms  completing  accounts  for  the  year  1923-24 
have  had  analyzed. 

The  151  farms  have  had  a  total  of  615  accounts  analyzed  since 
1911-1912. 

The  Society  for  the  Welfare  of  Norway  has  not  only  published 
yearly  reports  on  the  results  of  the  analyses  made,  but  in  addition  has 


Bull.  403] 


FARM-ACCOUNTING    ASSOCIATIONS 


made  a  number  of  special  investigations  with  reference  to  specific 
phases  of  the  accounts,  such  as  studies  in  the  use  of  labor  in  Norwegian 
agriculture.  A  special  effort  has  been  made  by  the  society  to  introduce 
farm  accounting  into  the  Norwegian  agricultural  schools. 

TABLE   3 

Distribution  op  Accounts  Analyzed  for  the  153   Farms  Kerorting   to  the 

Society  for  the  Welfare  of  Norway  in  1923-24  with  Reference 

to  Number  of  Yearly  Accounts  for  Each  Farm 


Yearly  accounts  for 

each  farm 

Number  of  farms... 


1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

53 

18 

17 

14 

3 

6 

4 

7 

11 

7 

4 

2 

Finland. — Finland  began  the  publication  of  farm-account  analyses 
in  1913,  when  122  farm  accounts  were  received  for  the  year  1912. 
The  Agricultural  Department  (Lantbruksstyrelsen)  of  the  Republic  of 
Finland  is  in  charge  of  this  work.  Table  1  (p.  7)  shows  the  number 
of  reports  received  each  year. 

In  addition  to  the  above  number  there  have  been  other  accounts 
kept.  For  various  reasons,  such  as  lack  of  funds  for  analyses,  or  faults 
in  the  records,  these  accounts  were  not  included  in  the  above  totals. 

The  accounts  are  most  evenly  distributed,  records  being  received 
from  every  province  of  Finland.  The  distribution  according  to  area 
is  not  as  uniform  as  might  be  desired.  A  difficulty  encountered  in 
most  of  the  countries  with  established  farm-accounting  work  is  to 
obtain  accounts  from  the  smaller  farms.  For  the  338  farms  analyzed 
in  1922,  the  distribution  according  to  area  is  as  in  table  4. 


TABLE  4 
Distribution  of  Farm  Accounts  According  to  Area,  1922-23 

Size  of  Farm  Number 

Under  5  hectares  :  12.35  acres 5 

Between  5-10  hectares  :  12.35-24.7  acres 43 

Between  10-25  hectares  :  24.7-37.05  acres 149 

Between  25-50  hectares  :  37.05-123.5  acres 79 

Between  50-100  hectares  :  123.5-247.0  acres 49 

Over  100  hectares  :  247.0  acres 13 

Total 338 

It  should  be  remembered  that,  prior  to  1918,  Finland  was  a  Grand 
Duchy  under  Russian  protection.  Civil  war  raged  throughout  the 
land  in  1918  and  it  was  not  until  1919  that  order  was  completely 
restored.  The  interest  in  farm  accounting  has  grown  steadily  since 
that  time. 


10 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


Sweden. — The  first  collective  report  in  Sweden  was  issued  in  1914 
when  results  were  reported  for  1912-13  and  for  1913-14.  While  this 
was  the  first  collective  report  issued,  a  farm-accounting  association 
had  been  established  several  years  before.  For  the  year  1921-22 
the  results  from  380  farm  accounts  were  analyzed.  The  Swedish 
accounts  are  analyzed  and  the  results  published  by  the  Royal  Agri- 
cultural Department  of  Sweden  (Kungl.  Lantbruksstyrelsen).  The 
work  in  Sweden  has  grown  slowly  but  steadily  as  table  1  shows  (p.  7). 

The  distribution  of  accounts  according  to  area  for  the  year  1921-22 
and  in  addition  for  the  ten  years  1912-1922  is  given  in  table  5. 


TABLE  5 

Distribution  of  Farm  Accounts  According  to  Area,  1921-22  and  Ten-year 

Period,   1912-22 


1921 

1922 

1912-1922 

Size  of  farm 

Number 

Total  hectares 

Number 

Hectares 

Acres 

Up  to  10 

24.71 

128 

971 

534 

10. 1-25 

24.96-61.78 

108 

1,671 

533 

25. 1-50 

62.0  -123.55 

44 

1,594 

430 

50. 1-100 

123.80-247.1 

24 

1,687 

178 

Over  100 

247.1 

76 

16,795 

358 

Totals 

380 

22,718 

2,033 

The  Swedish  accounts  include  a  large  number  of  the  accounts  of 
small  holdings — typical  of  Sweden,  as  the  distribution  of  the  total 
number  of  farms  according  to  the  area  cultivated  in  1919  was  as 
follows  :8 

Size  of  farm  Number 

Up  to  10  hectares  252,942 

Between  10.1-30  hectares  62,993 

Between  30.1-50  hectares  7,478 

Between  50.1-100  hectares  3,233 

Over  100  hectares  1,789 


It  should  be  noted  that  the  division  is  according  to  the  cultivated 
area,  not  according  to  the  total  area. 

While  the  organizations  already  described  have  served  a  most 
useful  purpose,  limitations  in  funds  to  carry  on  such  work,  together 


Kungl.     Statistiska  Centralbyran,  Statistisk  Arsbok  for  Sverige,  1-330'.     1925. 


BULL.  403]  FARM-ACCOUNTING   ASSOCIATIONS  11 

with  difficulty  in  arousing  the  interest  of  farmers,  have  prevented 
to  a  considerable  extent  the  widespread  growth  of  farm  accounting. 

Denmark. — It  was  the  failure  of  farm  accounting  to  grow  rapidly 
which  led  to  a  rather  widespread  discussion  in  Denmark  of  ways  and 
means  to  promote  such  work.  Under  the  auspices  of  the  agricultural 
unions  (Landboforeninger)  farm  accounts  had  been  kept  in  various 
places  in  Denmark.  On  the  Island  of  Samso,  farm  accounts  have 
been  kept  since  1902,  and  the  agricultural  union  in  the  vicinity,  of 
Odense  has  carried  records  since  1911. 

In  1910  the  Federation  of  Danish  Agricultural  College  Graduates 
conducted  an  investigation  to  discover  the  causes  for  the  failure  of 
farm  accounting  to  make  progress.  Three  main  reasons  were  assigned  : 
(1)  ignorance,  (2)  distrust  of  results  obtained  from  analyses  of  farm 
accounts,  and  (3)  pressure  of  other  duties  preventing  the  giving  of 
the  proper  care  in  analyzing  results  of  accounting. 

Shortly  afterward  a  committee  representing  the  various  agricul- 
tural societies  and  interests  of  Denmark  studied  the  situation  and  in 
1913  made  a  report.  This  committee  recommended  that  either  special 
farm  accounting  associations  (Regnskabsforeninger)  or  enlarged  cow 
testing  associations  (Kontrolforeninger)  be  formed.  It  was  also  recom- 
mended that  a  system  of  farm  accounts  be  prepared  which  could  be 
used  by  all  classes  of  farmers,  for  although  accounts  had  been  kept 
on  many  farms,  the  system  was  not  uniform  and  consequently  no 
comparisons  could  be  made  between  farms  nor  could  reliable  com- 
parable statistical  material  be  obtained.  There  was  unanimity  of 
opinion  that  the  farm-accounting  system  should  be  the  same  whether 
for  large  or  small  farms,  whether  the  farmer  made  up  his  own  account 
or  obtained  outside  help.  By  comparisons  not  only  could  various 
farm  businesses  in  different  sections  of  the  kingdom  be  judged,  but 
different  enterprises  of  agriculture  (e.g.,  dairying  and  grain  growing) 
on  the  same  and  different  farms  could  be  compared.  The  hope  was 
expressed  that  a  uniform  system  would  lead  to  a  friendly  rivalry  and 
a  desire  on  the  part  of  many  further  to  exert  themselves.  Emphasis 
was  placed  on  the  need  for  simplicity,  especially  in  connection  with 
the  farmer 's  daily  work  on  the  report.  Many  of  the  recommendations 
have  since  been  carried  out. 

The  question  as  to  ways  and  means  of  carrying  out  the  work  on 
the  part  of  the  farmer  led  to  the  recommendation  for  organization. 
That  the  most  ideal  procedure  would  be  to  have  the  farmer  carry  his 
own  account  was  admitted,  provided  he  was  capable  of  carrying  it 
through  to  completion.  In  this  way  the  farmer  would  come  in  contact 
with  all  the  details  of  the  work  and  he  would  consequently  have  the 


12  UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 

best  possible  opportunities  to  use  them  in  analyzing  his  business. 
Every  effort  having  as  its  object  the  advancing  of  independent 
accounting  should  be  encouraged. 

Danish  farmers  had  long  been  familiar  with  the  organization  of 
cow-testing  associations,  as  the  first  one  in  the  world  was  founded  in 
Denmark  in  1895  with  13  members ;  in  1926  these  associations  embraced 
30,920  farmers  owning  410,280  cows.  They  therefore  anticipated  some 
of  the  difficulties  in  the  achievement  of  their  ideal  of  having  every 
farmer  do  his  own  accounting.  Arguments  against  individual  inde- 
pendent accounting  were  almost  the  same  as  those  against  the  testing 
of  milk  by  individual  farmers.  Farmers  understood  the  methods  used 
in  the  testing  of  milk,  but  the  testing  was  not  done  regularly  by  them. 
The  farmer  as  a  rule  did  not  have  the  time  to  spend  in  lines  of  work 
which  he  considered  outside  of  actual  production  endeavors.  Many 
farmers  also  believed  that  their  time  could  be  spent  to  better  advan- 
tage in  other  ways  and  that  the  most  economical  way  to  have  testing 
done  was  to  invite  the  dairymen  into  a  partnership  for  the  purpose  of 
employing  a  trained  man  to  visit  each  herd  at  regular  intervals  and 
weigh  and  test  the  milk  of  each  cow.  Cow-testing  associations  were 
widespread  and  it  was  thought  desirable  to  combine  with  them  the 
accounting  work.  This,  however,  was  not  entirely  practicable  in  every 
case.  Hence,  separate  farm-accounting  associations  were  formed,  and 
these  have  been  the  most  successful  agents  in  making  farm-accounting 
work  known.  In  organization  and  operation  these  associations  are 
quite  similar  to  cow-testing  associations. 

DANISH   ORGANIZATIONS   IN   AGRICULTURE 

Danish  agricultural  organizations  are  of  two  types:  (1)  the  agricul- 
tural societies  (Landboforeninger  and  Husmandsforeninger),  which 
promote  the  scientific  and  educational  interests  of  agriculture  and 
between  them  enroll  197,546  members  (1925),  and  (2)  the  cooperative 
associations.  Farm-accounting  associations  have  been  organized  by 
the  first  type.  These  agricultural  societies  are  again  divided  into  two 
parts.  Small  landholders  (farmers  who  possess  less  than  20  acres) 
comprise  the  membership  of  the  one  branch  of  the  agricultural  societies 
(Husmandsforeninger)  while  the  remainder  of  the  farmers  constitute 
the  other  branch  of  agricultural  societies  (Landboforeninger).  The 
latter  societies,  as  might  be  expected  from  their  organization,  have 
been  more  active  in  forming  farm-accounting  associations. 

These  societies  (Landboforeninger)  correspond  to  the  county  farm 
bureaus  of  California  except  that  there  are  usually  several  agricul- 


BULL.  403]  FARM-ACCOUNTING   ASSOCIATIONS  13 

tural  societies  in  each  county  (or  amt).  There  are  in  Denmark  22 
counties  (amter)  and  in  these  136  agricultural  societies  with  an 
average  membership  of  approximately  914.  The  membership  dues 
vary  from  1  to  40  crowns  (25  cents  to  $10)  and  in  1925  averaged  a 
trifle  over  5  crowns  ($1.25)  yearly.  These  societies  concern  themselves 
with  all  that  has  to  do  with  the  technical  and  educational  side  of  agri- 
culture in  their  districts.  Committees  are  appointed  to  look  after  the 
special  interests  of  the  community,  for  example,  animal  husbandry, 
agronomy,  young  people's  work,  farm  machinery,  farm  accounting, 
etc.  Farm  advisors  (Konsulenter)  or  specialists  in  these  lines  of  work 
may  be  employed  by  these  various  societies.  The  state  contributes  two- 
fifths  of  the  salary  of  these  farm  advisors  or  specialists,  the  society 
contributing  the  other  three-fifths.  Several  societies  in  the  same 
county  may  use  the  same  advisor  or  one  advisor  may  be  placed  in 
charge  of  several  lines  of  work. 

Small  holders'  societies  are  organized  as  parish  units  and  these  in 
turn  are  organized  as  federations  of  societies.  Farm  advisors  for 
various  lines  of  work  are  appointed  as  in  the  case  of  the  societies  of 
larger  landholders.  One  advisor  may  even  serve  both  classes  of 
societies. 

The  organization  of  farm-accounting  associations. — Farm-account- 
ing associations  are  as  a  rule  formed  as  special  branches  of  the  societies 
just  mentioned.  The  members  of  the  agricultural  societies  by  the  pay- 
ment of  a  certain  sum  can  join  a  farm-accounting  association.  At 
times  cow-testing  associations  are  used  as  the  organization  through 
which  the  farm  accounting  is  accomplished,  but  a  separate  association 
is  the  rule.  In  a  cow-testing  association  the  size  of  the  herd  governs 
the  number  of  members.  In  a  farm-accounting  association  usually 
the  size  of  the  farm  is  the  limiting  factor  in  determining  the  number 
of  members  in  any  one  association.  The  maximum  number  of  farms 
which  can  be  controlled  by  one  man  will  not  go  higher  than  40-50. 

The  farm-account  advisor  or  specialist. — The  farm  advisor  or 
specialist  in  farm  accounting  is  the  most  important  member  of  the 
association.  In  practically  all  cases  these  specialists  are  graduates  of 
the  Royal  Danish  Agricultural  College  (Kgl.  Veterinaer-og  Landbo- 
h0jskole)  and  have  had  a  basic  training  in  economics.  The  farm- 
account  advisor  is  therefore  a  man  with  some  technical  training. 
Under  the  Danish  system  he  has  had  some  farm  experience,  since 
experience  is  a  prerequisite  for  admission  to  the  Royal  Agricultural 
College  of  Denmark.  In  education  and  experience  the  farm-account 
advisor  would  correspond  to  an  Assistant  Farm  Advisor  in  California. 
The  usual  wage  in  Denmark  for  this  work  was  2500  to  7000  crowns 


14 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


yearly  ($625  to  $1750  in  1925).  A  mode  of  conveyance  is  not  always 
necessary  on  account  of  the  closely  settled  agricultural  area  but  in 
going  from  farm  to  farm  bicycles  and  motorcycles  are  used  where 


Fig.  1. — Outline  map  of  Denmark.  Each  dot  represents  the  location  of  a 
farm-accounting-  association.  The  Island  of  Bornholm  (off  the  coast  of  Sweden) 
is  represented  in  the  lower  right-hand  corner. 


necessary.  A  few  possess  motor  cars.  To  receive  state  support  for 
the  specialist's  salary  the  accounting  must  (1)  cover  the  entire  farm 
business,  (2)  be  conducted  on  uniform,  prescribed  accounting  forms, 
and  (3)  be  available  so  that  the  results  may  be  analyzed  and  published. 


Bull.  403] 


FARM-ACCOUNTING    ASSOCIATIONS 


15 


Fig.  2. — Map  of  California  showing  relative  areas  of  California  and 
Denmark.  Denmark  has  10.6  per  cent  of  the  land  area  of  California.  Denmark 
has  approximately  the  same  area  as  each  of  the  shaded  areas  on  the  map. 


16  UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 

Procedure  in  associations. — The  specialist  visits  the  farm  in  his 
association  as  often  as  possible  in  order  to  facilitate  the  keeping  of 
accurate  accounts.  As  a  rule  the  farmer  makes  entries  in  a  day-book. 
The  reports,  however,  are  made  up  by  the  specialist  himself  in  close 
cooperation  with  the  farmer  and  without  occupying  any  more  of  the 
farmer's  time  than  is  absolutely  necessary. 

To  insure  uniformity  in  keeping  accounts  certain  rules  have  been 
set  up  by  the  Danish  Bureau  of  Farm  Management  and  Agricultural 
Economics.  Cooperation  with  the  Bureau  of  Farm  Management  and 
Agricultural  Economics  is  obtained  by  having  the  associations  observe 
the  following  rules  in  order  to  facilitate  comparisons  later: 

1.  All  accounts  must  start  at  the  same  time  of  the  year,  either 
April  1  or  May  1. 

2.  The  accounts  must  be  kept  on  forms  prescribed  by  the  Bureau 
of  Agricultural   Economics   and   Farm   Management. 

Form  and  extent  of  account. — Two  types  of  accounts  may  be  kept, 
the  participant  making  his  own  choice.  The  first  type,  known  as  form 
A,  is  as  a  rule  used  for  the  small  farm.  Form  B,  the  second  type, 
gives  far  more  detail  and  is  especially  adapted  to  larger  farms  on 
which  several  farming  enterprises  are  carried  on  simultaneously. 

Form  A  takes  into  account  the  business  as  a  whole  without  con- 
sideration of  the  internal  details  or  enterprises.  In  final  form  it 
consists  of  four  parts : 

1.  An  inventory  account  is  given  with  detailed  statements  of  the 
capital  used  in  agriculture  and  at  least  a  summary  of  capital  used  in 
other  enterprises  such  as  the  household.  A  private  capital  account 
(capital  used  outside  of  the  actual  farm  business)  is  carried  if  a  com- 
mon cash  account  is  used.  It  is  desirable  to  take  complete  inventories 
for  purposes  of  control  and  to  judge  later  of  the  economic  foundation 
of  the  entire  farm  business. 

2.  A  cash  account  is  carried  embracing  all  cash  transactions. 

3.  A  product  and  labor  account  aims  to  give  a  statement  of  the 
products  and  labor  which  are  exchanged  between  the  farm-business, 
the  household  and  the  private  accounts  (outside  of  agriculture  and 
the  household). 

4.  A  yearly  summary  gives  information  on  the  cash  income  of  agri- 
culture, together  with  costs.  The  profitableness  of  the  entire  business, 
the  economics  of  the  household,  and  the  private  income  and  expenses 
as  well  as  changes  in  the  inventory  are  recorded.  In  this,  the  farm 
business  is  treated  as  an  entity. 

Form  B  carries  six  main  parts  as  follows:  (1)  and  (2)  are  the 
same  as  those  listed  under  form  A. 


BULL.  403]  FARM-ACCOUNTING   ASSOCIATIONS  17 

3.  A  stock  account  lists  the  feeds  used  in  the  various  branches  of 
the  livestock  work  and  in  addition  notes  are  carried  on  additions  and 
deductions  to  the  flocks  and  herds  as  well  as  other  information  which 
is  necessary  for  a  clear  and  full  knowledge  of  livestock  accounts.  In 
addition  to  the  above  mentioned  features,  cognizance  is  taken  of  the 
supplies  and  use  of  milk,  grain  and  feedstuffs. 

The  livestock  account  is  divided  into  several  sections — cattle,  swine 
and  horses.  On  the  larger  establishments  cattle  may  be  divided  into 
milk  cows,  bulls,  young  stock,  beef  cattle,  etc. 

If  sheep,  goats  or  poultry  play  an  important  role  in  the  farm 
business  special  sections  can  be  added.  With  each  of  these  must  be 
carried  a  corresponding  feed  account.  On  the  other  hand,  all  of  the 
minor  animal  enterprises  can  be  assembled  under  a  common  account 
labeled  "Other  Animals." 

When  the  member  of  the  farm-accounting  association  is  also  a 
member  of  a  cow-testing  association,  the  work  of  the  latter  can  be 
used  as  a  link  in  the  collective  stock  accounts. 

4.  A  labor  or  field  account  is  carried  which  either  (a)  has  a 
common  account  for  the  field  work  and  segregates  the  labor  for  field, 
livestock,  other  occupations,  household,  private  account,  etc.,  or  (b) 
has  field  operations  divided  in  accordance  with  the  main  crops  which 
in  Denmark  are  usually  listed  as  follows :  1,  grain,  2,  root  crops, 
3,  grass  and  green  feed.  When  circumstances  make  it  necessary  fields 
can  be  divided  further,  for  example,  into  1,  roots,  2,  potatoes  and 
tubers  for  sale,  3,  grass,  4,  meadows,  5,  alfalfa,  6,  crops  for  livestock 
(not  already  listed),  7,  seed  crops,  etc.  A  special  account  can  also  be 
made  for  fallow  land,  etc. 

Recommendations  are  made  that  such  detailed  divisions  of  field 
crops  should  be  made  only  in  cases  where  areas  of  a  considerable  size 
are  involved  and  where  the  crops  involved  play  an  important  part  in 
the  economics  of  the  farm  business  as  a  whole.  Such  a  detailed 
specialization  of  a  field  account  demands  the  most  careful  work  in 
keeping  a  day-book.  Reports  on  seed,  manuring  and  crop  yields  are 
listed  as  with  (a). 

5.  The  household  list  includes  all  the  home-grown  products  used 
on  the  farm. 

6.  The  yearly  report,  in  addition  to  giving  an  insight  into  the  farm 
business  as  a  whole,  also  gives  details  of  the  various  parts  of  the 
business  (figs.  3,  4). 

Costs  of  accounting. — The  main  expense  in  connection  with  the 
operation  of  the  farm-accounting  association  is  the  salary  of  the  farm 
advisor  or  specialist.    Under  certain  specified  conditions  the  state  will 


18 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


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Bull.  403] 


FARM-ACCOUNTING    ASSOCIATIONS 


19 


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20 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


pay  two-fifths  of  the  salary  of  the  farm  advisor  provided  the  members 
of  the  association  pay  the  remaining"  three-fifths.  The  individual 
farmers  pay  in  proportion  to  the  area  of  their  farms.  A  typical 
example  is  Copenhagen  County.    The  farmers  of  Copenhagen  County 


TABLE  6 
Scale  of  Payment  in  a  Typical  Farm-accounting  Association  in  Denmark 


T0nclelantfio 


Up  to  30 

31  to  40 

41  to  50 

51  to  60 

61  to  70 

71  to  80 

81  to  90 

91  to  100 

101  to  120... 
121  to  140... 
141  to  160... 
161  to  180... 
181  to  200 ... 
201  to  220... 
221  to  240... 
241  to  260 ... 
261  to  280... 
281  to  300... 
301  to  325... 
326  to  350... 
351  to  375... 
376  to  400... 
401  to  425... 
426  to  450... 
451  to  475... 
476  to  500  . 
501  to  550... 
551  to  600... 
601  to  650... 
651  to  700... 
701  to  750... 
751  to  800... 
801  to  850... 
851  to  900... 
901  to  1000. 


Acres 


37 

39 

52 

65 

78 

91 

104 

116 

129 

155 

181 

206 

232 

258 

284 

309 

335 

361 

386 

418 

451 

483 

515 

547 

579 

611 

643 

708 

772 

836 

900 

965 

1029 

1093 

1157 


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.8- 
.5- 
.2- 
.9- 
.6- 
.3- 


51.4 
64.3 
77.1 
90,0 
102.8 
115.7 
128.5 
154.2 
180.0 
205.6 
231.3 
257.0 
282.7 
.0-  308.4 
. 7-  334. 1 
.4-  359.8 
.1-  385.5 
.8-  417.6 
.9-  449.8 
.0-  481.9 
.2-  514.0 
546.1 
578.3 
610.4 
642.5 
706.8 
771.0 
5-  835.3 
5-  899.5 
8-  936.8 
0-1028.0 
3-1092.3 
5-1156.5 
8-1285.0 


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.8- 
.0- 


Cr  owns11  yearly 


60 
70 
80 
90 
100 
110 
120 
130 
140 
150 
160 
170 
180 
190 
200 
210 
220 
230 
240 
250 
260 
270 
280 
290 
300 
310 
320 
330 
340 
350 
360 
370 
380 
390 
400 


Dollars1: 


14.88 
17.36 
19.84 
22.32 
24.80 
27.28 
29.76 
32.24 
34.72 
37.20 
39.68 
42.16 
44.64 
47.12 
49.60 
52.08 
54.56 
57.04 
59.52 
62.00 
64.48 
66.96 
69.44 
71.92 
74.40 
76.88 
79.36 
81.84 
84.32 
86.80 
89.28 
91.76 
94.24 
96.72 
99.20 


o  The   farm-accounting   committee   of   "The   Three   Agricultural    Societies' ' 
(De  tre  Landboforeningers  Eegnskabsudvalg). 

io  A  T0nde  Land  is  56,000'  square  feet  or  approximately  1.285  acres, 
ii  Danish  crown  =  $0,268  (par).  12  Jan.  1,  1926,  1  crown  =  $0,248. 


BULL.  403]  FARM-ACCOUNTING   ASSOCIATIONS  21 

(Kj0benhavns  Amt)  have  three  well  established  agricultural  societies 
(Landboforeninger).  The  county  in  1924  had  one  farm-accounting 
association  with  two  spcialists.  A  committee9  from  the  three  societies 
set  the  scale  of  payment  for  1923-24  and  also  for  1924-25  as  in  table  6. 
Thus  a  farmer  with  20  acres  in  Copenhagen  County  would  pay 
approximately  $15  yearly,  while  the  one  with  40  acres  $17.50,  100 
acres  $27,  etc.  Copenhagen  County  is  rather  fertile,  the  agriculture 
is  intensive  and  the  county  occupies  the  same  relation  to  the  city  of 
Copenhagen  that  Los  Angeles  County  occupies  to  the  City  of  Los 
Angeles.     The  Danish  farmer  is  willing  to  pay  for  good  accounting 


Fig.  5. — A  typical  farmstead  (Bondergaard)  in  Denmark.     This  type  usually 
has  an  area  of  from  32  to  150  acres. 

work.  Costs  vary  in  the  different  associations.  Heretofore  the  small- 
holders' societies  have  lagged  behind  the  other  farmers  in  the  forma- 
tion of  the  farm-accounting  associations  but  during  the  past  year  an 
active  agitation  has  been  conducted  among  the  small  holders  in  order 
to  interest  them  in  accounting  work. 

Progress  of  the  farm-accounting  associations  in  Denmark. — The 
first  farm-accounting  association  of  the  type  described  was  formed  in 
Denmark  in  1911.  The  growth  was  at  first  very  slow.  In  the  crop 
year  1916-17  only  seven  associations  turned  records  over  to  the 
Bureau  of  Farm  Management  and  Agricultural  Economics  for  revision 
and  analysis.  The  number  of  associations  cooperating  with  the  central 
bureau  has  grown  steadily  since  1916  as  can  be  seen  from  table  7. 

TABLE  7 

Farm-accounting  Associations   in   Denmark  Cooperating  with   the  Bureau 

of  Farm  Management  and  Agricultural  Economics 

Years  Number  Years  Number  Years  Number 

1916-17 7    1919-20 26    1922-23 50 

1917-18 17    1920-21 39    1923-24 55 

1918-19 26    1921-22 47    1924-25 59 


22 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


The  total  number  of  associations  in  1925-26  was  66  including  a 
limited  number  (3  or  4)  of  associations  not  cooperating  with  the 
central  bureau.  Approximately  3280  farms  were  studied  daily  by 
their  owners  and  the  accounting  specialists.  The  total  area  of  these 
farms  was  approximately  323,433  acres  (133,100  hectares). 

The  farm-accounting  associations  are  quite  generally  distributed 
over  Denmark  (see  fig.  1).     The  number  is  considerably  larger  in  the 


Fig.  6. — Small  holder's  house  (Husmand).     The  small  holder  lives  on  a 
farm  of  usually  less  than  20  acres. 


Fig.  7. — View  on  a  large  farm  in  Denmark  (Herregaard). 

more  fertile  agricultural  areas  of  the  kingdom  in  East  Jutland  and 
in  the  islands  east  of  the  Peninsula  of  Jutland.  The  western  half  of 
Jutland  is  less  fertile  than  the  other  sections  of  the  country.  The 
Island  of  Fyen  (the  second  largest  island  of  Denmark — east  of  the 
Peninsula  of  Jutland)  with  an  area  almost  identical  with  that  of 
Glenn  County,  California  (1347  squares  miles)  has  nine  farm- 
accounting  associations. 

Bureau  of  farm  management  and  agricultural  economics. — Form 
and  organization.     A  discussion  of  the  farm-accounting  associations 


Bull.  403]  FARM-ACCOUNTING   ASSOCIATIONS  23 

would  be  incomplete  without  reference  to  the  Bureau  of  Farm  Manage- 
ment and  Agricultural  Economics  (Det  land0konomiske  Driftsbureau). 
This  bureau  corresponds  to  branches  of  large  semi-public  institu- 
tions in  Switzerland,  Norway,  and  Sweden.  The  bureau  is  adminis- 
tered by  a  committee  whose  members  are  chosen  by  a  group  of  organi- 
zations especially  interested  in  this  work.  The  committee  selects  the 
leader  of  the  bureau  and  determines  with  him  the  principles  by  which 
the  accounts  shall  be  analyzed.  The  leader  of  the  bureau  has  the 
responsibility  for  the  execution  of  the  technical  work,  and  in  addition, 
undertakes  to  carry  on  the  cooperative  work  with  the  local  farm- 
accounting  associations.  For  the  past  few  years  Prof.  O.  H.  Larsen, 
Professor  of  Agricultural  Economics  in  the  Royal  Agricultural  College 
of  Denmark,  has  been  the  leader.  Every  year  a  report  is  issued  on  the 
results  of  the  investigations.  This  report  is  sent  out  to  all  farmers 
who  have  provided  accounts  for  the  investigation. 

The  bureau  is  supported  by  various  agricultural  organizations 
including  the  Royal  Agricultural  Society,  The  Federation  of  Farmers ' 
Unions,  The  Federation  of  Small-Holders'  Societies  and  the  Coopera- 
tive Council.  For  the  year  1926  the  Danish  Parliament  made  a  direct 
contribution  of  57,000  crowns  for  this  work  (one  crown  at  par  on 
January  2,  1926  =  24.80  cents). 

During  1925,  in  addition  to  the  administrative  head,  the  bureau 
consisted  of  one  specialist  and  three  regular  assistants  and  an  office 
force  of  five. 

The  Danish  bureau  was  comparatively  late  in  getting  under  way, 
being  established  in  1918.  It  has  as  its  main  purpose  the  obtaining, 
analyzing  and  publishing  of  reliable  farm  accounts  or  the  data  for 
such  accounts  for  Danish  farms  of  different  size,  fertility,  and  loca- 
tion as  well  as  of  those  of  different  business  types.  Accounting  mate- 
rial is  obtained  through  the  cooperative  efforts  of  the  local  farm- 
accounting  assocations,  farmers'  associations,  small-holders'  associa- 
tions, and  individuals.  All  of  these  seek  to  have  the  accounting  done  by 
uniform  methods.  During  1924-25,  59  out  of  the  63  farm-accounting 
associations  were  affiliated  with  the  bureau.  Results  were  published 
for  the  first  time  in  1918  after  the  foundation  of  the  bureau  for 
the  year  1916-17  when  statistics  for  75  farms  were  analyzed  and 
the  number  has  grown  steadily.  Owing  to  the  limited  facilities  of 
the  bureau  only  the  most  typical  accounts  are  analyzed.  These  are 
selected  by  the  specialists  in  the  various  sections  of  the  kingdom  as 
being  most  typical.  The  aim  of  the  bureau  is  to  have  as  many  sections 
of  the  kingdom  as  possible  represented  by  these  individual  accounts. 
Not  only  the  section  but  the  area  of  the  farm  and  the  type  of  farming 


24 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


are  taken  into  consideration.  The  bureau  prefers  to  analyze  accounts 
of  farms  from  which  analyses  of  records  have  previously  been  made. 

Analyses  of  farm  accounts. — During  the  year  1922-23,  534  farm 
accounts  were  analyzed  and  the  results  compiled  by  the  bureau.  Of 
these,  499  were  sent  by  the  farm-accounting  associations  and  35  by 
the  owners  of  large  farms.  Only  a  limited  number  of  the  accounts 
from  the  various  associations  are  analyzed  by  the  bureau  and  the 
results  published.  The  remainder  are  analyzed  by  the  farm-accounting 
specialist  employed  by  the  local  association.  A  yearly  record  of  the 
number  of  analyses  of  farm  accounts  by  the  Bureau  of  Farm  Manage- 
ment and  Agricultural  Economics  can  be  found  in  table  1  (p.  7). 

The  number  of  yearly  accounts  sent  in  by  the  farms  reporting  in 
each  of  the  years  since  1916-17  can  be  found  in  table  8. 

TABLE  8 

Distribution  of  Accounts  Each  Year  Segregated  According  to  Number  of 

Yearly  Accounts  Farms  have  Eendered  to  the  Bureau  of 

Farm  Management  and  Agricultural  Economics 


Years 

1916- 
1917 

1917- 

1918 

1918- 
1919 

1919- 
1920 

1920- 
1921 

1921- 
1922 

1922- 
1923 

1923- 
1924 

1924- 
1925 

Farms 

Yearly  accounts: 

1 

75 

183 

113 

121 

147 

110 

114 

134 

2 

52 

146 

82 

103 

121 

98 

91 

3 

46 

128 

71 

85 

92 

81 

4 

40 

109 

55 

64 

78 

5 

38 

94 

48 

55 

6 

35 

86 
32 

43 
74 

7 

8 

30 

Total  for  each  year.. 

75 

235 

305 

391 

468 

500 

534 

586 

670* 

Total  accounts  examined 3764 

*  Estimate  by  Prof.  O.  H.  Larsen. 


Data  are  not  at  hand  to  show  the  percentage  of  farms  remaining 
in  associations  from  year  to  year.  The  above  table,  however,  is  indica- 
tive of  the  fact  that  a  high  percentage  of  farmers  must  be  of  the 
opinion  that  the  work  is  worth  while.  Thirty  of  the  farms  out  of  the 
original  75  were  listed  for  the  eighth  year  of  accounting.    There  may 


Bull.  403] 


FARM-ACCOUNTING    ASSOCIATIONS 


25 


have  been  others  of  the  original  75  farms  on  the  active  list  of  their 
accounting  associations  as  the  bureau  uses  less  than  20  per  cent  of 
all  the  records. 

With  the  increase  in  the  number  of  farm-accounting  associations, 
the  task  of  the  bureau  in  selecting  accounts  from  farms  of  comparable 
area  has  been  greatly  simplified.  The  following  table  shows  the 
number  of  accounts  by  years  divided  according  to  area : 


TABLE  9 
The  Area  of  the  Farms  Used  in  Farm-accounting  Investigations 


Year 

Under  10 
hectares 

10-20 
hectares 

20-30 
hectares 

30-50 
hectares 

50-100 
hectares 

Over  100 
hectares 

Average  size 
hectares  :  acres 

1916-17 

3 

13 

23 

20 

15 

1 

36.8 

90.93 

1917-18 

14 

42 

68 

70 

29 

12 

39.8 

98.35 

1918-19 

24 

51 

78 

95 

38 

19 

42.4 

104.77 

1919-20 

35 

67 

83 

108 

49 

29 

44.6 

110.21 

1920-21 

47 

90 

111 

121 

60 

37 

43.4 

107.24 

1921-22 

40 

89 

120 

143 

67 

41 

46.0 

113.66 

1922-23 

45 

82 

88 
95 

121 
129 

154 
160 

74 
69 

52 
51 

50.2 
46.2 

124.04 

1923-24 

114.16 

Average  size,  hec- 
tares, 1923-1924... 

5.8 

15.6 

25.5 

38.4 

65.9 

220.3 

Acres 

14.33 

38.55 

63.01 

94.89 

162.84 

544.36 

The  distribution  with  reference  to  area  is  becoming  more  even. 
The  interest  among  the  small  holders  is  such  that  during  the  past 
few  years  the  bureau  has  been  enabled  to  analyze  a  proportionally 
increasing  number  of  accounts  from  farms  with  an  area  of  less  than 
10  hectares  (24.71  acres). 


THE  AGEICULTUEAL  AEEA  OF  DENMARK  AND  NUMBEE  OF  FARMS 

Of  Denmark's  total  area  of  about  4,302,000  hectares  (16,603  square 
miles  or  10,625,940  acres),  about  76  per  cent  is  utilized  for  agriculture, 
9  per  cent  is  timbered,  while  the  greater  part  of  the  remainder  consists 
of  areas  which  are  useless  for  agriculture.  The  total  area  of  Denmark 
is  10.6  per  cent  that  of  the  State  of  California  (fig.  2).  The  improved 
land  in  California  farms  (1920)  covered  an  area  of  11,878,339  acres 
while  the  improved  land  in  Denmark  (1920)  amounted  to  approxi- 
mately 8,091,720  acres. 


26 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


Divided  according  to  the  size  of  the  agricultural  area  there  were 
in  1919  the  following  number  of  farms  with  an  agricultural  area  of 
more  than  0.55  hectares  (1.36  acres)13  as  shown  in  table  10. 


TABLE  10 
Area  of  Farms  in  Denmark 


Area 

Number 

Agricultural  area 

hectares  :  acres 

Total 

Per  cent 

1000 
hectares 

Per  cent 

0.55  to  3.3  :  1.36-8. 15 

3.3  to  15  :  8.15-32.1. 

43,891 

90,748 

65,916 

4,039 

916 

419 

21.3 

44.1 

32.0 

2.0 

0.4 

0.2 

82 
721 
1,879 
332 
153 
147 

2.5 

21  8 

15.0  to  60  :  32. 1-128.4 

56.7 

60.0  to  120  :  128.4-256.8 

120.0  to  240  :  256.8-513.6 

10.0 
4.6 

240.0  and  over  :  513.6  and  over 

4.4 

Total 

205,929 

100.0 

3,314 

100.0 

There  were  136,413  farms  in  California  in  1925  (117,620  in  1920). 


DISCUSSION  OF  EESULTS 

One  of  the  most  important  features  of  the  work  is  the  discussion 
meetings  which  are  held  after  the  accounts  are  analyzed  by  the  bureau. 
Matters  vital  to  the  entire  community  are  oftentimes  decided  at  these 
meetings.  For  a  discussion  of  the  general  results  of  the  work  see 
page  32. 

The  individual  farmer  is  interested  first  in  his  own  welfare.  The 
following  example  will  serve  as  an  illustration.  The  Danish  dairy 
farmer  belonging  to  a  farm-accounting  association  has  before  him 
the  various  items  relating  to  his  farm  business.  He  has  in  addition 
the  records  of  other  farms  and  herds  and  can  thereby  make  com- 
parisons. First  of  all,  the  dairy  farmer  has  at  hand  the  yields  of  his 
cows,  and  the  relative  amounts  of  concentrated  feeds  and  roughage  con- 
sumed— usually  the  main  cost  items  listed  on  the  accounts.  Often  one 
of  the  three  items — yield  of  milk,  concentrates,  or  roughage  is  responsi- 
ble for  either  profit  or  loss  in  the  entire  farm  business,  The  income 
from  mlik  or  butterfat,  growth  of  young  stock  (and  sale)  at  times  may 
be  out  of  line  with  incomes  of  similar  farms,  In  a  business  of  this  type 
other  cost  items  such  as  horse  and  man  labor,  depreciation,  insurance, 


Bet  Statistiske  Department,  Statistisk  Aaarbog,  1-247.     1925. 


BULL.  403]  FARM-ACCOUNTING    ASSOCIATIONS  27 

amortization,  etc.,  in  addition  to  interest  on  the  investment,  house  rent, 
and  managerial  salary  are  taken  into  account  by  the  Danish  dairy 
farmer  belonging  to  a  farm-accounting  association. 

An  idea  of  the  scope  of  the  203-page  report  issued  by  the  bureau 
on  the  results  of  accounts  analyzed  in  the  year  1923-24  may  be 
obtained  from  the  table  of  contents  of  this  report  (page  28).  Appendix 
C  (page  32)  gives  more  in  detail  the  analyses  of  the  accounts  of 
certain  farms  in  one  of  the  farm-accounting  associations. 


CONCLUSION 

The  object  of  this  publication  is  to  give  an  account  of  the  organiza- 
tion and  results  of  farm-accounting  associations  of  Europe,  particu- 
larly those  of  Denmark.  Much  of  the  effort  in  Denmark  was  first 
expended  in  generalizing  the  system  and  making  it  uniform.  This  was 
brought  about  first  by  an  agreement  between  various  agencies  as  to  the 
form  of  account  most  suitable  to  the  kingdom  as  a  whole.  After  agree- 
ment on  this  point,  the  next  problem  was  to  make  the  work  of  farm 
accounting  known  in  the  agricultural  districts.  Several  agencies  were 
entrusted  with  the  task.  Since  Denmark  possessed  a  system  of  well 
organized  agricultural  societies  it  was  decided  to  interest  these  in  the 
work.  Meetings  and  short  courses  were  held  for  those  interested  at 
the  various  agricultural  schools  and  peoples'  colleges.  One  of  the 
serious  problems  in  the  way  of  extending  farm  accounting  was  a  lack 
of  trained  men  to  take  charge  of  the  work.  The  various  agricultural 
schools  including  the  Royal  Agricultural  College  were  induced  to  train 
all  students  in  accounting  work  following  the  system  agreed  upon  by 
the  agencies  previously  mentioned. 

The  Danish  farmer  has  been  given  an  excellent  training  in  self- 
government  which  has  promoted  a  rapid  development  of  cooperative 
organization  and  leadership.  Also,  the  extensive  system  of  agricul- 
tural education  prevailing  makes  it  possible  for  instruction  to  be  given 
to  a  large  proportion  of  the  younger  farmers. 

Another  advantage  in  extending  the  system  of  farm-accounting 
work  described  is  that  Denmark  is  a  small  country,  with  a  compara- 
tively large  number  of  small  and  medium  farms  owned  by  the 
operators.  In  addition,  a  comparatively  uniform  system  of  agricul- 
ture is  the  rule.  The  farm-account iug  association  with  its  steady  and 
sure  growth  augurs  well  to  rival  the  cow-testing  association  in  its 
scope  and  in  its  application  to  the  business  of  farming  in  Denmark. 


28  UNIVERSITY    OF    CALIFORNIA EXPERIMENT   STATION 


APPENDIX   A 

Table  of  Contents  of  "The  Investigations  of  Business  Conditions 
of  Agriculture.  VIII  Farm-Accounting  Results  of  Danish  Agriculture 
for  the  Year  1923-24.'  '14 

Preface. 

1.  General  conditions  in  1923-24. 

(a)   Weather  and  harvest. 

(6)   Market  and  price  conditions. 

(c)    Common  characteristics  of  year  1923-24. 

2.  Extent  of  investigation  and  composition  of  material. 

(a)  Total  number  of  accounts  and  grouping. 

(b)  Use  of  area  involved. 

(c)  Amount  of  production. 

3.  Amount  and  composition  of  capital  of  farmers. 

4.  Gross  returns. 

(a)  Amount  and  composition. 

(b)  Use  of  gross  returns. 

5.  Business  costs. 

6.  The  results  of  the  agricultural  enterprise. 

(a)  Net  returns. 

(b)  Interest  on  investment. 

(c)  Income  of  debt-free  farms  and  the  services  of  the  family. 

(d)  Social  returns  of  the  family. 

7.  The  influence  of  size  of  farm  on  the  result. 

(ai)   Farms  under  10  hectares  (small  holders). 

(b)  Farms  between  10  and  50  hectares  (medium  farms). 

(c)  Farms  over  50  hectares  (large  and  medium-large  farms). 

8.  The  economics  of  the  individual  branches  of  the  enterprises. 


(a)   Livestock. 

(1)   Horses. 

(2)   Cattle. 

(3)   Swine. 

(4)   Poultry. 

(b)   Field  crops. 

(1)   Total  field  crops. 

(2)   Crops  grown  for  sale. 

(3)   Home  grown  feeds. 

9. 

Expenses  of  the  household. 

10. 

Additions. 

(a)  Money  transactions. 

(b)  Wealth. 

11. 

Main  tables. 

(a)  Use  of  area  and  harvest  yields. 

(b)   Capital. 

(c)   Gross  returns. 

(d)   Expenses  and  results. 

14  Larsen,  O.  H.    Unders0gelser  over  Landbrugets  Driftsforhold  8;  Kegnskabs- 
resultater  fra   danske   Landbrug  i  Aaret  1923-24,   1-203.     1925. 


BULL.  403]  FARM-ACCOUNTING   ASSOCIATIONS  29 

APPENDIX  B 

RESULTS  OF  INDIVIDUAL  FARM  ACCOUNTS 

The  following  table  gives  the  individual  results  for  eight  different 
medium-sized  farms  in  the  same  locality  for  1923-24.  It  will  be  noted 
that  the  first  six  farms  have  given  good  returns  while  the  returns  from 
the  last  two  are  poor.  The  results  of  the  farm  cost-accounting  are 
illustrations  of  the  applications  which  are  made  by  the  individual 
farmer  in  connection  with  the  analyses  obtained. 

The  following  brief  analyses  of  the  above  records  are  given  in  order 
to  point  out  the  manner  in  which  the  individual  farmers  can  use  the 
results  obtained.  It  should  also  be  remembered  that  these  results  are 
discussed  at  meetings  of  the  local  farm-accounting  associations  after 
the  year  of  work  is  finished. 

Among  the  six  farms  is  one  (No.  1)  a  farm  almost  without  cattle; 
and  swine  are  used  only  for  the  domestic  needs  of  the  farm.  The 
nearness  of  this  farm  to  Copenhagen  allows  an  almost  direct  sale  of 
plant  products.  This  is  especially  true  of  potatoes  (about  400  crowns 
per  hectare  are  received),  while  the  remainder  of  the  gross  returns 
from  agronomical  operations  are  divided  about  evenly  between  grain, 
seed  and  straw.  The  costs  on  this  farm  are  low,  because  little  feed 
of  a  concentrated  nature  is  purchased;  on  the  other  hand  the  pur- 
chase of  manure  is  relatively  large,  although  not  so  large  as  one  might 
expect. 

No.  2  has  a  still  larger  area  devoted  to  potatoes,  since  the  sale  of 
potatoes  contributes  not  less  than  540  crowns  per  hectare  to  the  entire 
enterprise.  On  the  other  hand,  there  is  but  little  sale  of  grain  or  seed. 
The  sale  of  animal  husbandry  products  is  relatively  large  in  spite  of 
the  relatively  small  herd  of  cattle.  The  cows  have  milked  particularly 
well  and  there  is  also  a  large  number  of  swine,  which  have  paid  fairly 
well.  Taken  as  a  whole,  this  is  a  farm  managed  in  a  very  superior 
way,  having  in  comparison  to  the  large  gross  returns,  such  small 
expenses. 

Nos.  3  and  4  are  both  mainly  producing  sugar  beets.  No.  3  has,  in 
addition,  a  large  area  devoted  to  the  growing  of  seeds,  and  in  this  case 
it  is  an  especially  well  paying  venture  in  the  growing  of  cocksfoot 
grass  {Dactylis  glomerata)  which  has  brought  the  net  returns  to  a 
high  point,  while  the  growing  of  seeds  plays  a  small  role  on  farm 
No.  4.  The  latter  farm  has  on  the  other  hand  had  remarkable  results 
from  the  growing  of  sugar  beets,  the  area  devoted  to  them  on  this  farm 
being  one-fourth  of  the  total.    The  grain  yield  and  the  milk  yield  are 


30 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


not  greatly  different  on  the  two  farms,  but  No.  3  has,  on  account  of  its 
large  area  in  seed  crops,  a  far  less  area  in  grain  than  No.  4.  Neither 
of  the  two  farms  has  large  numbers  of  either  cattle  or  swine,  but  there 
is  a  good  milk  yield  on  both  farms.  Costs,  however,  show  an  essential 
difference,  since  the  expenses  for  feed  are  less  in  No.  4 ;  and  the  labor 


TABLE  11 

Eesults  for  Some  Medium-sized  Farms 


Farm 

l 

2 

3 

4 

5 

6 

7 

8 

Per  cent  returns  on  capital. 

15.1 

22.5 

14.6 

14.5 

16.0 

15.1 

1.9 

2.6 

Agricultural    capital    per 

hectare,  crowns  

3075 

2137 

2589 

3148 

3272 

3003 

3062 

2079 

Land  value  per  hectare, 

crowns 

1482 

961 

1239 

1449 

1490 

1015 

1235 

1136 

Grain  harvest  per  hectare, 

kilograms 

3491 

2851 

3570 

3267 

3439 

2753 

3203 

2307 

Milk  yield,  kilograms  per 

cow 

4125 
35.3 

3583 

28.6 

3587 

47.8 

3969 
46.2 

2888 
46.3 

3041 

42.7 

3031 

Per  cent  of  area  in  grain 

40.7 

53.0 

Roots   (for  feeding)  and 

potatoes 

29.4 

41.1 

6.3 

5.0 

23.1 

17.9 

15.1 

16.7 

Grass  and  green  feed 

21.8 

19.7 

24.9 

19.6 

30.7 

25.1 

27.9 

30.3 

Roots  for  market  (sugar 

beets,  etc.) 

18.3 
21.9 

23.7 
3.9 

Seed  crops 

8.1 

3.9 

10.7 

14.3 

Fallow 

Size  of  animal  husbandry 

unit  per  100  hectares 

Number  of  work  horses... 

17 

14 

20 

14 

14 

19 

15 

12 

Number  of  milk  cows 

10 

43 

37 

47 

91 

80 

52 

36 

Number  of  young  stock... 

7 

18 

36 

41 

63 

26 

42 

37 

Number  of  swine 

5 

136 

116 

128 

119 

335 

382 

79 

Gross  returns,  crowns  per 

hectare 

1154 

1403 

1347 

1081 

1614 

1437 

1513 

600 

From  plant  culture 

(agronomy) 

1006 

569 

673 

478 

94 

134 

220 

75 

From  animal  husbandry 

88 

804 

655 

579 

1439 

1270 

1264 

507 

From  cattle 

48 

16 

690 

422 
309 
922 

380 
256 
969 

272 
273 
625 

973 

358 

1089 

585 
640 
983 

418 

806 

1456 

325 

From  swine 

135 

Costs,  crowns  per  hectare.. 

545 

Labor 

330 

390 

386 

307 

525 

303 

307 

202 

Feed 

22 

65 

106 

305 
68 
90 

331 
59 
54 

110 
49 
41 

346 
36 
56 

460 
33 

98 

851 
57 

85 

119 

Manure 

49 

Buildings,  inventory 

47 

Other  costs 

167 

69 

139 

118 

126 

89 

156 

128 

Net  returns,   crowns   per 

hectare   .. 

464 

481 

378 

456 

525 

454 

57 

55 

BULL.  403]  FARM-ACCOUNTING    ASSOCIATIONS  31 

costs  are  small  in  comparison  with  the  large  sugar  beet  area,  which 
accounts  for  the  net  returns  being  about  80  crowns  higher  than  in 
No.  3. 

Nos.  5  and  6  are  farms  with  large  animal  husbandry  holdings;  the 
first  has  a  large  and  exceptionally  high  producing  herd  of  dairy  cattle 
while  the  number  of  swine  is  quite  large  on  No.  6.  Not  only  does  the 
latter  farm  possess  a  large  number  of  swine,  but  the  profit  per  pig 
delivered  is  high — 22  crowns  apiece.  In  addition,  this  farm  has  a 
good  income  from  the  growing  of  grass  seed.  The  low  labor  costs  for 
No.  6  also  contribute  to  the  good  results,  while  No.  5  has  an  uncom- 
monly large  labor  cost,  far  greater  than  on  any  of  the  other  farms 
listed.  The  total  cost  is  kept  down,  however,  by  the  large  area 
(23  per  cent)  in  alfalfa,  which  lowers  the  cost  of  feed.  The  yields  on 
this  farm  are  high. 

Profits  are  not  always  synonymous  with  large  gross  returns.  No.  7 
has  almost  as  large  gross  returns  as  No.  5  and  the  culture  must  be 
characterized  as  being  as  intensive ;  but  in  this  case  there  is  a  much 
larger  purchase  of  feedstuffs  than  on  any  of  the  other  farms — 851 
crowns  per  hectare.  The  explanation  for  this  lies  in  the  large  swine 
herd,  which,  in  spite  of  the  gross  returns  of  806  crowns  per  hectare, 
shows  almost  as  large  a  deficit  per  pig,  as  there  is  profit  on  farm  No.  6, 
namely,  23  crowns;  and  this  is  the  main  reason  for  the  poor  results 
of  the  farm  considered  in  its  entirety.  The  large  herd  of  cattle  is  also 
partially  responsible,  since  the  average  amount  of  concentrate  given  to 
each  cow  is  far  too  large  in  proportion  to  the  mediocre  milk  production, 
while  on  the  other  hand  the  roughage  used  is  too  small. 

If,  however,  the  farming  is  perceived  to  be  too  intensive  in  No.  7, 
especially  as  it  concerns  the  animal  husbandry,  the  opposite  seems  to 
be  the  case  on  No.  8,  where  the  herds  are  small,  and  where  the  animals 
have  been  fed  too  little.  This  is  expressed  in  the  far  too  small  gross 
returns  from  the  dairy  herd.  The  small  herd  fed  insufficiently 
furnishes  only  small  amounts  of  manure  and  this  reflects  on  the  yield 
of  grain,  since  in  spite  of  the  good  soil  it  is  only  23  hectokilograms  per 
hectare;  and  this  is  so  much  more  unfortunate  as  the  grain  area  is 
comparatively  large — 53  per  cent  of  the  total. 


32 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


APPENDIX    C 

RESULTS  OF  DANISH  FARM  ACCOUNTS  IN  THE  FINANCIAL 

YEAR  1924-2515 

Number  and  composition  of  accounts. — To  demonstrate  more 
clearly  the  value  of  the  Danish  farm  accounting  a  limited  number  of 
illustrations  will  be  used  in  the  following  discussion.  The  material 
analyzed  comprises  a  provisional  survey  of  two  hundred  accounts, 
grouped  according  to  size  as  shown  in  table  12.  It  will  be  seen  from 
this  table  that  the  grouping  is  not  exactly  the  same  for  1924—25  as  for 
the  preliminary  report  for  1923-24.  This  is  because  some  farms  have 
been  omitted  for  various  reasons ;  also  the  accounts  are  not  sent  in  to 
the  Bureau  of  Farm  Management  and  Agricultural  Economics  in  the 
same  consecutive  order  each  year. 


TABLE  12 
Grouping  of  the  Accounts  According  to  Areais 


1924-25 

1923-24 

Size  of  farms 
(hectares) 

Number  of 
accounts 

Average  area, 
ha.* 

Number  of 
accounts 

Average  area, 
ha.* 

Less  than  10 

30 
34 
43 
40 

28 
25 

5.6 
15.1 
24.5 

37.8 

66.7 

219.2 

20 
32 
49 
49 

28 
22 

5.8 

10-20 

20-30 

16.3 
24.4 

30-50 

38.6     ' 

50-100 

66.4 

100  or  more 

221.3 

Total 

200 

53.0 

200 

52.3 

*  1  Ha.  =  l  hectare  =  2.471  acres. 

In  the  following  tables,  therefore,  the  results  of  the  200  accounts 
from  1924-25  are  not  compared  with  the  provisional  report  from 
1923-24  (as  in  table  12)  but  with  the  total  number  of  accounts  of  that 
year,  because  this  gives  a  better  ground  for  comparison.  The  bureau 's 
researches  on  conditions  in  1923-24  comprised  results  from  586  farms 
with  a  total  area  of   27,073  hectares    (66,897   acres).     Within  the 


15  Prom  unpublished  material  obtained  through  the  kindness  of  Prof.  O.  H. 
Larseri,  Director  of  the  Bureau  of  Farm  Management  and  Agricultural  Eco- 
nomics and  Professor  of  Agricultural  Economics  in  the  Boyal  Agricultural 
College  of  Denmark. 

16  The  reports  of  670  farms  for  1924-25  are  being  analyzed  by  the  Bureau. 
The  analyses  of  200  of  these  are  being  used  in  this  discussion. 


Bull.  403] 


FARM-ACCOUNTING    ASSOCIATIONS 


33 


different  size  groups  for  the  two  years  there  are,  of  course,  small 
deviations  with  regard  to  the  area  of  farms.  It  should  also  be  men- 
tioned, that  among  the  small  holdings  there  is  a  larger  percentage  of 
accounts  from  the  islands  in  1924-25  (66  per  cent)  than  in  1923-24 
(50  per  cent).    See  map,  page  14. 

Agricultural  Capital. — Table  2  gives  a  survey  of  the  amount  and 
distribution  of  agricultural  capital.  The  differences  between  1924-25 
and  1923-24  are  not  very  great,  but  with  regard  both  to  the  permanent 
capital  (land  and  buildings)  and  to  the  working  capital  the  figures 
are,  nevertheless,  somewhat  higher  in  1924-25,  on  the  average  about 
7  per  cent.  This  is  largely  due  to  the  fact  that  the  200  farms  are 
on  the  average  better  than  the  total  number  of  farms  in  1923-24.  The 
increase  in  the  working  capital  is  partly  due  to  the  increased  livestock, 
partly  to  the  increase  of  supplies  and  equipment  and  partly  to  the 
higher  prices  paid  for  grain,  feeding  stuffs  and  fertilizer. 

TABLE  13 
Agricultural  Capital  in  Crowns  (Kroner)  per  Hectare^ 


Land 
and 

buildings 

Working  capital 

Agricultural  capital 

Size  of  farm 
(hectares) 

Livestock 

Supplies 

Other 
inventory 

Total 

1924-25 

1923-24 

Less  than  10    . 

2711 
2047 
2110 
1863 
1855 
1785 

642 

484 
473 
418 
382 
297 

84 
47 
60 
51 
60 
71 

298 
222 
208 
165 
138 
122 

1024 
753 
741 
634 
580 
490 

3735 
2800 
2851 
2497 
2435 
2275 

3205 

10-20 

20-30 

2694 
2577 

30-50 

50-100 

100  or  more 

2499 
2302 
2158 

200  farms,  1924-25. 

2064 
1924 

454 
443 

61 
41 

195 
186 

710 
870 

2774 

All  farms,  1923-24. 

2594 

Grass  returns. — Compared  with  1923-24  the  gross  returns  for 
1924-25  have  increased  considerably,  partly  owing  to  a  greater  yield, 
but  chiefly  to  a  rise  of  prices,  especially  for  grain  (30  per  cent), 
potatoes  (40  per  cent),  butter  (15-16  per  cent),  bacon  (11  per  cent). 
The  prices  for  cattle,  beef  and  eggs  are  about  the  same  as  for  the 
preceding  year. 

For  sugar  beets  and  some  seeds  the  prices  are  considerably  lower 
than  for  the  previous  year,  but  for  other  seed  crops  there  is  an  even 
greater  decline.  The  price  index  for  all  agricultural  products  increased 
about  11  per  cent. 


17  1    crown    (par)  =  26.8    cents.     January    2,    1926,    1    crown  —  24.8    cents. 
1  hectare  =  2.471  acres. 


34 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


The  influence  of  the  circumstances  mentioned  above  on  the  gross 
returns  may  be  seen  in  table  14.  With  regard  to  the  crop  production 
the  increase  is  chiefly  due  to  the  higher  price  for  cereal  crops,  since 
the  yield  was  a  little  smaller  than  in  1923.  Potatoes  gave  a  smaller 
yield  while  the  yield  of  sugar  beets  was  about  the  same  as  the  previous 
year. 

TABLE  14 
Gross  Returns  in  Kroner  per  Hectare 


Products  from 

Total 

Size  of  farms 
(hectares) 

Crops 

Cattle 

Swine 

Other 

animals 

Sundries 

1924-1925 

1923-1924 

Less  than  10 

96 
81 
144 
122 
199 
287 

844 
617 
631 
519 
438 
409 

678 
418 
463 
345 
297 
94 

224 
73 
61 
44 
28 
10 

75 

59 
33 
30 

27 
19 

1917 
1248 
1335 
1060 
989 
819 

1549 

10-20 

20-30 

1114 
1017 

30-50 

50-100 

100  or  more 

899 

817 
697 

200  farms,  1924-25 

148 
111 

584 
506 

394 
304 

73 

66 

41 

36 

1240 

All  farms,  1923-24 

1023 

In  animal  production  there  has  been  an  increase  in  all  branches, 
especially  for  swine  and  cattle.  The  increased  returns  for  swine  have 
amounted  to  30  per  cent,  due  to  a  larger  production  and  to  higher 
prices,  whereas  the  increased  returns  for  cattle  are  due  chiefly  to  the 
increase  of  price  on  dairy  products ;  beef  prices  are  about  the  same  as 
for  the  former  year. 

The  gross  returns,  as  a  whole,  have  been  increased  by  217  crowns 
per  hectare  or  about  21  per  cent,  and  the  increase  is  greatest  for  farms 
below  10  and  between  20  and  30  hectares,  amounting  here  to  25  to  30 
per  cent.  The  increase  is  probably  partly  a  consequence  of  the  fact 
that  this  group  comprises  more  holdings  on  the  good  soil  of  the 
islands  than  the  previous  year.18 

Costs  of  the  farm  business. — The  increase  of  the  working  costs  is 
not  quite  proportionate  to  that  of  the  gross  returns.  The  average 
increase  for  all  farms  amounts  to  161  crowns  or  20  per  cent.  All  the 
costs  show  an  increase,  but  this  is  decidedly  greatest  for  concentrates, 
amounting  here  to  not  less  than  35  per  cent ;  next  come  ' '  other  costs ' ' 
(taxes,  insurance,  repairs,  improvements,  etc.),  with  about  24  per  cent, 
whereas  the  increase  for  the  remaining  costs   ( feedstuff s  other  than 


is  Denmark  is  as  a  rule  divided  into  two  parts:  (1)  the  peninsula  of  Jutland 
and  (2)  the  islands  east  of  Jutland  in  the  Baltic. 


Bull.  403] 


FARM-ACCOUNTING    ASSOCIATIONS 


35 


concentrates,  twine,  seed,  etc.)  amounts  to  5-15  per  cent  only.  The 
increase  of  labor  costs  is  about  12  per  cent  according  to  the  new  regula- 
tion of  wages  in  the  fall  of  1924.  Great  uniformity  exists  in  agricul- 
tural wages  in  Denmark.  Agreements  are  entered  into  every  year  by 
organizations  of  laborers  and  farmers  with  reference  to  rates  of 
payment. 

TABLE  15 
Working  Expenses  in  Crowns  per  Hectare,  1924-25 


Size  of  farm 

Labor 

Con- 
centrates 

Artificial 
manure 

Other 

purchases 

Other 
costs 

Totals 

(hectares) 

1924-1925 

1923-1924 

Less  than  10 

559 
356 
357 
286 
265 
241 

587 
312 
347 
259 
211 
151 

40 
43 
48 
40 
45 
44 

149 
106 
106 

78 
80 
53 

226 
174 
188 
156 
144 
134 

1561 
991 

1046 
819 
745 
623 

1266 

10-20 

20-30 

883 
801 

30-50 

708 

50-100 

100  or  more 

647 

541 

200  farms,  1924-25 

346 
309 

316 
234 

44 

38 

96 
93 

172 
139 

974 

All  farms,  1923-24.. 

813 

The  heavy  increase  in  the  consumption  of  concentrates  is  a  natural 
consequence  of  the  extended  production  of  bacon,  and  increased  milk 
production  has  also  demanded  a  larger  amount  of  concentrates  in 
1924-25. 

Results. — Table  16  gives  a  complete  summary  of  the  financial  result. 
It  appears  that  the  net  returns  have  increased  from  210  to  266  crowns 
per  hectare  or  about  27  per  cent.  The  increase  is  rather  variable 
within  the  different  size  groups  of  farms,  but  when  the  accounts  of 
all  670  farms19  are  at  hand  the  proportion  between  the  various  groups 
will  probably  be  altered  somewhat. 

On  the  average  the  net  returns  on  the  agricultural  capital  are  9.6 
per  cent  against  8.1  per  cent  in  1923-24.  If  this  percentage  is  cal- 
culated on  the  basis  of  the  full  sale  value  of  the  total  capital  the  rise 
will  not  be  quite  so  heavy,  because  the  difference  between  the  sale 
value  and  the  booked  value  is  greater  in  1924-25  than  in  1923-24. 
For  the  two  years  the  net  returns,  based  on  the  sale  value,  were  6.8 
per  cent  and  6.1  per  cent,  respectively. 

The  last  two  columns  of  the  table  show  the  actual  labor  earnings 
of  the  family  when  reckoning  the  normal  interest  on  the  total  agri- 
cultural capital  as  5  and  6  per  cent,  respectively,  which  cannot  be 


1!)  The  reports  of  670  farms  for  1924-25  arc  being  analyzed  by  the  Bureau. 
The  analyses  of  200  of  these  are  being  used  in  this  discussion. 


36 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


considered  too  high  for  the  financial  year  1924-25.  Possibly  it  might 
have  been  more  correct  to  have  used  a  rate  of  7  per  cent  because  the 
official  discount  was  about  this  figure  for  1924-25.  If  we  use  6  per 
cent,  the  average  labor  earnings  of  the  family  for  all  accounts  were 
262  crowns  per  hectare  in  1924-25,  against  204  crowns  in  1923-24. 


TABLE  16 

Complete  Summary  of  the  Financial  Eesults 
Crowns  per  Hectare 


Agri- 
cultural 
capital 

Gross 

returns 

Work- 
ing 
costs 

Net  returns, 
1924-25 

Net  returns, 
1923-24 

Labor  earnings 

of  the  family, 

1924-25,  when 

deducting 

Size  of  farm 
(hectares) 

Crowns 

per 
hectare 

In  %  of 

agri- 
cultural 
capital 

Crowns 

per 
hectare 

In  %  of 

agri- 
cultural 
capital 

5  per 

cent 
interest 

6  per 

cent 
interest 

Less  than  10 

3735 

2800 
2851 
2497 
2435 
2275 

1917 
1248 
1335 
1060 
989 
819 

1561 
991 

1046 
819 
745 
623 

356 
257 
289 
241 
244 
196 

9.5 

9.2 

10.1 

9.7 
10.0 

8.6 

283 
231 
216 
191 
170 
156 

8.8 
8.6 
8.4 
7.6 
7.4 
7.2 

624 
296 
282 
210 
196 
119 

587 

10-20 

20-30 

30-50 

268 
254 

185 

50-100 

100  or  more 

172 

96 

200  farms,  1924-25... 

2774 
2594 

1240 
1023 

974 

813 

266 

9.6 

289 
230 

262 

All  farms,  1923-24... 

210 

8.1 

204 

TABLE  17 
Labor  Earnings  of  the  Family 


Size  of  farms 

Crowns  per  hectare 

Actual  earnings  expressed  in  per 
cent  of  calculated  earnings 

(hectares) 

1924-25 

1923-24 

1924-25 

1923-24 

Less  than  10 

587 

268 
254 
185 
172 
96 

497 
241 
175 
138 
100 
59 

129.0 
149.7 
186.8 
196.8 
232.4 
259.5 

122.4 

10-20 

20-30 

140.1 
141.1 

30-50 

50-100 

100  or  over 

142.3 
147.1 
184.4 

Average 

2,262 

204 

161.7 

136.0 

For  the  various  size  groups  the  labor  earnings  of  the  family 
expressed  both  in  crowns  per  hectare  and  as  a  percentage  of  the  calcu- 
lated return  for  family  labor  plus  salary  for  management  are  com- 
pared, as  may  be  seen  in  table  17. 


BULL.  403]  FARM-ACCOUNTING   ASSOCIATIONS  37 

From  this  table  (columns  4  and  5)  it  will  be  seen  that  the  actual 
labor  earnings  have  been  considerably  greater  than  the  calculated 
normal  remuneration.  In  the  calculated  normal  remuneration  is 
included  labor  at  the  going  wage  and  in  addition  a  certain  sum  for 
management.  In  1924-25  on  the  average  for  all  accounts  the  actual 
remuneration  has  been  61.7  per  cent  greater  than  the  calculated 
remuneration.  In  1923-24  this  was  36.0  per  cent.  If  reckoning  with 
6  per  cent  interest  on  the  actual  sale  value  (instead  of  the  value  on  the 
farm  books)  the  corresponding  figures  will  be  only  18.5  per  cent  and 
1.3  per  cent,  respectively,  and  if  using  7  per  cent  the  figures  will  in 
spite  of  the  favorable  result  of  the  year,  be  lower  than  the  calculated 
normal  remuneration. 


BIBLIOGRAPHY 

Borgedal,  Paul 

1922.  Unders0kelser  over  jordbrukets  driftsforhold.     13.     Regnskapsresul- 

tater    fra   norske    gaardsbruk;    Regnskapsaret    1920-1921;    1-127, 
Gr0ndahl  &  S0n,  Kristiania,  Norway. 

1923.  Ibid.  14  ...  .  1921-1922:   1-179,  E.  Sem,  Fredrikshald,   Norway. 

1924.  Ibid.  15  ...  .  1922-1923:   1-112,  E.  Sem,  Frekrikshald,  Norway. 

1925.  Ibid.  16  ...  .  1923-1924:   1-119,  Gr0ndahl  &  S0n.     Oslo,  Norway. 
1925.     Bidrag    til    belysning    av    arbeidsforbruket    i    det    norske    jordbruk 

(Beitrag  zur   Kenntnis  der  Arbeitsverwendung  in   der  Landwirt- 
schaft  Norwegens),  1-92.     Gr0ndahl  &  S0n.     Oslo,  Norway. 
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1913.  Udvalgsbetaenkning  angaaende  Eegnskabsf0ringen  indenfor  Land- 
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DOKKEN,   IVAR 

1925.     Landbrugs  Regnskab.     1-147.    Det  Sch0nbergske  Forlag.     Copenhagen. 
Ellila,  K.  J. 

1925.     Undersokning    av    lanthushallningens    rantabilitet    i    Finland    9,    10. 
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Five,  Haakon 

1913.  Unders0kelser  over  jordbrukets  driftsforhold.    2.     Nogen  Regnskaps- 

resultater    fra    norske    gaardsbruk;     Regnskapsaaret     1911-1912: 
1-96.     Gr0ndahl  og  S0n,  Kristiania. 

1914.  Ibid.  3  .  .  .  .  1912-1913:   1-106.     Gr0ndahal  &  S0n,  Kristiania. 

1915.  Ibid.  5  .  .  .  .  1913-1914:  1-120'.     Gr0ndahal  &  S0n,  Kristiania. 

1917.  Ibid.  7  .  .  .  .  1914-1915:   1-137.     Gr0ndahal  &  S0n,  Kristiania. 

1918.  Ibid.  8  .  .  .  .  1915-1916:   1-143.     Gr0ndahal  &  S0n,  Kristiania. 
1920.     Ibid.  1  Veiledning  i  landbruksregnskap:    1-141.     E.  Sem,  Fredriks- 
hald. 

1924.  Ibid.  4  Ovelsesopgaver  i  regnskapsf0rsel:  1-15.  E.  Sem,  Fredriks- 
hald. 


38  UNIVERSITY    OF    CALIFORNIA EXPERIMENT   STATION 

Hertel,  H. 

1924.  Kort  Oversigt  over  det  danske  Landbrug:  18-20,  25-48.  Blanco 
Lunos  Bogtrykkeri,  Copenhagen. 

Knudsen,  H.  M. 

1926.  Land0konomisk  Aarbog  for  1926:  1-101,  108.  Gyldendlaske  Bog- 
handel,  Nordisk  Forlag,  Copenhagen. 

Krosby,  Nils 

1919.  Unders0kelser    over   jordbrukets   driftsforhold.      9.      Regnskapsresul- 

tater   fra  norske    gaardsbruk;    Regnskapsaaret    1916-1917:    1-126. 
E.  Sem,  Fredrikshald,  Norway. 

1920.  Ibid.  10  ...  .  1917-1918:   1-125.     Gr0ndahal  &  S0n,  Kristiania. 

1921.  Ibid.  11  ...  .  1918-1919:   1-139.     Gr0ndahal  &  S0n,  Kristiania. 

1922.  Ibid.  12  ....  1919-1920:   1-135.     Gr0ndahal  &  S0n,  Kristiania. 

Lantbruksstyrelsen  (Finland) 

1924.  Undersokning  av  lanthushallningens  rantabilitet  i  Finland.  For- 
handsuppgifter  for  rakenskapsaret  1922-23,  Statsradets  Tryckeri. 
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Larsen,  O.  H. 

1919.  Unders0gelser  over  Landbrugets  Driftsforhold.     2.     Regnskabsresul- 

tater  fra  danske  Landbrug  i  Aaret  1917-1918:  1-122.     Aug.  Bang. 
Copenhagen,  Denmark. 

1920.  Ibid.  3  .  .  .  .  1918-1919:    1-136.  Aug.  Bang.  Copenhagen. 

1921.  Ibid.  4  .  .  .  .  1919-1920:    1-172.  Aug.  Bang.  Copenhagen. 

1922.  Ibid.  5  .  .  .  .  1920-1921:    1-187.  Aug.  Bang.  Copenhagen. 

1923.  Ibid.  6  .  .  .  .  1921-1922:    1-190.  Aug.  Bang.  Copenhagen. 

1924.  Ibid.  7  .  .  .  .  1922-1923:    1-207.  Aug.  Bang.  Copenhagen. 

1924.  Unders0gelser  over  Landbrugets  Driftsforhold;  Periodiske  Beret- 
ninger  1;  Begnskabsresultater  for  12  fynske  B0nderbrug  f0r,  under 
og  efter  Verdenskrigen.     Aug.  Bang.     Copenhagen. 

1924.  Landbrugets  Bogf0ring.  M.  Jespersen.     1-115.     Copenhagen. 

1925.  Unders0gelser    over   Landbrugets    Driftsforhold    8.      Regnskabsresul- 

tater  fra  danske  Landbrug  i  Aaret  1923-1924:  1-203.     Aug.  Bang. 
Copenhagen. 
Laur,  Ernst 

1920.  Wirtschaftslelire  des  Landbaus,  203-280.     Paul  Parey.     Berlin. 

1921.  Grundlagen    und    Methoden    der    Bewertung,    Buchaltung    und    Kal- 

kulation  in  der  Landwirtschaft.  2  Aufl.,  1-600.  Paul  Parey. 
Berlin. 
1923.  Untersuchungen  betreffend  die  Rentabilitat  der  schweizerischen 
Landwirtschaft  im  Erntejahre  1921-1922.  1.  Separatabdruck  aus 
dem  Landwirtschaftlichen  Jahrbuck  der  Schweiz  1923.  1-86. 
Verbandsdruckerei   A — G.   Bern,   Switzerland. 

1923.  Ibid.  2  .  .  .  .  1-115.     Verbandsdruckerei  A— G.  Bern. 

1924.  Ibid.     Erntejahre  1922-1923.     1  .  .  .  .  1-96.     Verbandsdruckerei  A— 

G.  Bern. 

1924.  Ibid.  2  .  .  .  .  1-111.  Verbandsdruckerei    A — G.    Bern. 

1925.  Ibid.     Erntejahre   1923-1924.     1  .  .  .  .     77-158.     Verbandsdruckerei 

A— G.  Bern. 


